Auto Loan Calculator
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Loan Breakdown
Find Average Tax Rate and Fees in Your State.
Amortization Schedule
| Year | Interest | Principal | Ending Balance |
|---|---|---|---|
| 1 | $1,835.98 | $7,222.21 | $32,777.79 |
| 2 | $1,466.48 | $7,591.71 | $25,186.08 |
| 3 | $1,078.07 | $7,980.12 | $17,205.96 |
| 4 | $669.80 | $8,388.40 | $8,817.56 |
| 5 | $240.63 | $8,817.56 | $0.00 |
Auto Loan Information
Auto Loans
Most people turn to auto loans during a vehicle purchase. They work as any generic, secured loan from a financial institution does with a typical term of 36, 60, 72, or 84 months in the U.S. Each month, repayment of principal and interest must be made from borrowers to auto loan lenders. Money borrowed from a lender that isn't paid back can result in the car being legally repossessed.
Dealership Financing vs. Direct Lending
Generally, there are two main financing options available when it comes to auto loans: direct lending or dealership financing. The former comes in the form of a typical loan originating from a bank, credit union, or financial institution. Once a contract has been entered with a car dealer to buy a vehicle, the loan is used from the direct lender to pay for the new car. Dealership financing is somewhat similar except that the auto loan, and thus paperwork, is initiated and completed through the dealership instead.
Vehicle Rebates
Car manufacturers may offer vehicle rebates to further incentivize buyers. Depending on the state, the rebate may or may not be taxed accordingly. For example, purchasing a vehicle at $50,000 with a cash rebate of $2,000 will have sales tax calculated based on the original price of $50,000, not $48,000.
Fees
A car purchase comes with costs other than the purchase price, the majority of which are fees that can normally be rolled into the financing of the auto loan or paid upfront.
- Sales Tax - Most states in the U.S. collect sales tax for auto purchases.
- Document Fees - This is a fee collected by the dealer for processing documents like title and registration.
- Title and Registration Fees - This is the fee collected by states for vehicle title and registration.
- Advertising Fees - This is a fee that the regional dealer pays for promoting the manufacturer's automobile.
- Destination Fee - This is a fee that covers the shipment of the vehicle from the plant to the dealer's office.
- Insurance - In the U.S., auto insurance is strictly mandatory to be regarded as a legal driver on public roads.
Auto Loan Strategies
Probably the most important strategy to get a great auto loan is to be well-prepared. This means determining what is affordable before heading to a dealership first.
Buying a Car with Cash Instead
Although most car purchases are made with auto loans in the U.S., there are benefits to buying a car outright with cash.
- Avoid Monthly Payments
- Avoid Interest
- Future Flexibility
- Avoid Overbuying
- Discounts
- Avoid Underwater Loan
Trade-in Value
A trade-in is a process of selling your vehicle to the dealership in exchange for credit toward purchasing another vehicle. Don't expect too much value when trading in old cars to dealerships.